Tight range trading, between 1.0280 and 1.02 characterized the pair’s trading at the beginning of the week. It then broke below 1.02 and got close to the next support line of 1.01 before bouncing back up and closing at 1.0270.
Most lines haven’t changed since last week’s outlook. USD/CAD is back to the 1.02 – 1.0280 range. Above 1.0280, the next line of resistance is 1.04.
1.04 was the long term support line of the 1.04 to 1.0750 range, and now works as a tough resistance line. Above, 1.0550 stopped the pair several times in the past, and is a minor resistance line.
The next line of resistance is at 1.0680, which stubbornly held the pair in June and several times in July. Apart from being the long term top border of the range, 1.0750 was also tested in May. Above, 1.0850 was a swing high in 2009 and a swing high in May as well.
Looking down under 1.0280, the 2009 low of 1.02 is the next support line. Note that it also worked as resistance after the pair hit parity in April. Lower, 1.01 is a minor line of resistance, and it’s followed by the ultimate support line – parity.
I remain bearish on USD/CAD.
Despite the blow from the employment figures, the situation in Canada is still great, and the Federal Reserve could weaken the greenback, sending USD/CAD for another attempt on parity.
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